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NY honeymoon to beget global powerhouse?
It was way back at its 2003 partners’ meeting that Linklaters decided to really go for it in New York. It was the only item on the agenda.
As reported last week on www. thelawyer.com (14 February), the firm’s US senior partner Paul Wickes argued that the signs are good that Linklaters’ US focus over the past few years is now paying off.
Maybe it was a coincidence that Wickes was speaking on Valentine’s Day, but it seems clear that Linklaters’ love affair with the US is still in a honeymoon period.
Five years on from the partners’ meeting, Wickes claims internal numbers on billing originations show there is now “a healthy balance” between the level of locally originated work and that sourced outside New York.
For Linklaters this represents the Holy Grail. The firm’s strategy is to win work globally on its clients’ most difficult and complex matters, which almost by definition are multijurisdictional.
“That’s what we’re now seeing happen in New York,” says Wickes.
Recent notable examples of this development include last year’s work for Royal Bank of Scotland(RBS) on its acquisition of ABN Amro and the current battle with mining giant BHP Billiton for Linklaters’ client Rio Tinto. On both deals the firm picked up the US corporate work.
This, argues New York corporate partner Larry Vranka, is a significant step forward; although as he points out, the ABN deal was also illustrative of what Linklaters has achieved outside Manhattan in terms of building its US practice.
“On the ABN deal,” says Vranka, “the key US partner was actually Tom Shropshire in London.”
The current Rio Tinto deal, which includes teams in both London and New York, is a perfect example of teamwork around the office network, Vranka contends.
“You start to build a momentum, you make a breakthrough,” he says.
With Rio Tinto, the breakthrough came when Linklaters advised the mining company on its acquisition of Alcan last year.
“They were obviously confident enough on the back of that to instruct us on the Billiton defence,” Vranka says.
On the ABN deal, Linklaters benefited from the fact that RBS’s usual US firm Davis Polk & Wardwell was already advising ABN and was therefore conflicted.
“We made a strong pitch and it helped that physically we had lawyers on the ground in both New York and London,” Vranka explains. “It was an opportunity and we took advantage of it. And if I may say so, we did a cracking job.”
As reported last week, the bank regulatory aspects of the deal went to Shearman & Sterling, as this is not yet part of Linklaters’ New York practice. “Frankly,” says Vranka, “this is one area we’re very keen to build on.”
Other areas the firm is looking to grow in New York include M&A. Worldwide, this represents around a third of Linklaters’ practice.
“It ought to be the same level in New York,” says Wickes. Linklaters has slightly fewer than 20 lawyers in its New York corporate team – just over 10 per cent of the office. “We want it to be up to around 30 per cent,” maintains Wickes.
Ironically, Vranka believes the current downturn may help Linklaters in its current recruitment push, arguing that lawyers are looking for where the growth is coming from.
“One answer to that is Asia, as well as Europe,” he says.
But New York remains critical to the firm’s ambitions of being the leading firm internationally.
As Vranka adds: “We can’t be the world’s leading global law firm unless we have a leading office in New York. It takes time, but over the past three years we’ve made very encouraging progress.”
Linklaters’ New York office, of course, remains a small fish in comparison with the whales of Wall Street and Midtown. So what would Vranka say to those larger US firms that argue the firm is still nowhere in the city? “I’d say that, 10-12 years ago, we didn’t have a US practice, period,” he replies.
Mayer Brown lite gives 9 per cent hike
The results for US firms are now flying in, but some have been anticipated more keenly than others.
In sporting terms, last year Mayer Brown had a shocker. It removed 45 partners from the equity while sources suggest it asked at least another 15 to take early retirement.
Out of the same door walked around 30-40 more partners during the course of the year. The net result was that Mayer Brown was close on 100 partners lighter by the end of 2007 than at the start.
Indeed, the firm’s global vice-chairman Paul Maher acknowledged to The Lawyer last Thursday (14 February) that the restructuring had had “some impact”.
Er, where exactly?
The restructuring was aimed at improving profitability. According to these results, it’s achieved that. A 9 per cent rise is fairly decent in anyone’s book.
And with almost 100 fewer partners, a 9 per cent growth in revenues ain’t bad either. Mayer Brown’s remaining partners must have been working damn hard to achieve that.
Can’t wait to see the revenue per lawyer figures.
Posted 15 February
The $5m dollar man
The financial reporting season is in full flow, so the obsession in New York this week is with numbers.
Actually, when is it not?Which brings me neatly to another number that’s doing the rounds in Manhattan this week – the one that everybody wants to know.
Namely, exactly what did it take to entice Ron Hopkinson, Latham’s former co-head of private equity, over to Cadwalader?Well, I’ve been quizzing a few people who should be in the know (Hopkinson, as you might imagine, is not saying). And the consensus is this: $5m guaranteed for at least two years.
Frankly – and this may come as a shock – I’d move for that.
Posted 13 February
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